KNOXVILLE - Downtown Knoxville is on track to see more hotels than the nine it already has.
On Tuesday, Knox County announced a Nashville company plans to turn the Andrew Johnson Building into a boutique hotel once Knox County Schools offices find a new place.
At the corner of Church and State Streets, crews are building a Courtyard Marriott and Residence Inn Hotel Complex. On Gay Street, crews are working to make the Farragut Hotel a Hyatt, set to open in December.
The Tennessean Hotel also opened this spring.
That’s four new hotels.
Ken Knight, the general manager of Crowne Plaza in downtown Knoxville, said the move is concerning because of basic supply and demand.
“You’re basically dividing the same pie into smaller pieces, which means everybody’s occupancy drops and in turn, everyone’s average rates will have to drop,” Knight said.
Knight said projections show occupancy rates to stay the same next year.
Visit Knoxville President Kim Bumpas said the group welcomes new business.
“We embrace the new projects and we’re going to start marketing those to new visitors,” Bumpas said.
Bumpas said over the last three years, hotel tax collections grew from $5 million to nearly $8 million, which she said is big for the area.
Visit Knoxville books events at the Knoxville Convention Center, and Bumpas said people often book at hotels near it when they come to town for an event. For the 2016-17 fiscal year, the group booked 30 events at the Convention Center.
Bumpas also said companies do research before investing in properties.
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